Are Layoffs and Terminations the Same? Seeking Clarity After Sudden Job Loss

I am working in an MNC company. There are no projects, and I resigned on February 1, 2023. But all of a sudden, I received a termination slip without any reason. Not only for me, but our team also had 62 people laid off.

My question is, are termination and layoff the same?

Hi, both are different.

Termination of an employee will be on the following grounds:
- Poor performance
- Misconduct
- Not reporting to duty without information

Termination will take place if there is an issue with an employee, but even in such cases, a proper disciplinary process should be followed, including a domestic enquiry. Employees should be provided with sufficient opportunity to defend themselves as per the principles of natural justice.

A layoff takes place when an employer intends to close their business or there is no work to carry out in the establishment.

Termination will have an impact on the future of employees, whereas in a layoff, it is not the employee's fault. Termination due to the absence of projects is not right.

In a generic sense, the terms "lay off" and "termination" as used in the realm of employment across the world mean the same, indicating the termination of employment of any number of persons, particularly due to a lack of work at the instance of the employer.

Distinction in the Industrial Disputes Act, 1947

According to the Industrial Disputes Act, 1947, it is a temporary cessation of employment of any number of workmen employed in an industrial establishment because of the failure, refusal, or inability of the employer due to certain specific reasons mentioned under section 2(kkk) of the Act. The distinction is that there is the subsistence of the contract of employment during the entire period of layoff and payment of layoff compensation subject to certain conditions.

In the scenario described in the initial post, it is the termination of employment amounting to retrenchment in respect of those who did not resign from their jobs.